The first French property market index is to be set up by French insurance companies following consultations with British firm Investment Property Databank.
Despite widely differing valuation practices between the two countries, the insurers’ body, Federation Francaise des Societes d’Assurance, “looks ready to recommend a system almost identical to that developed by IPD in the UK”, according to the company’s managing director, Rupert Nabarro.
The move follows an attempt by IPD to apply its UK methods to 167 properties held by insurance companies in the Ile de France. The results – performance data for 1989-90 – were difficult to obtain and unreliable, says Nabarro. Speaking at last week’s Henry Stewart European Property conference, he explained: “There is no tradition of property measurement in France, and far less emphasis is placed on changes in capital values.”
With the French property market in decline, some potential contributing institutions are resisting a market index. But the FFSA has said that it will fund the project and promote a new code of valuations based on DCF methods. No published data is expected, however, until 1995 at the earliest.
